The recovery in commercial real estate remains solid but the
rebound in housing markets continues to slow, according to the FDIC's
latest survey of examiners and other knowledgeable personnel at federal
bank and thrift regulatory agencies. The quarterly poll, conducted in
late April, covers developments in real estate markets during the prior
three months.

"We are pleased to see continued reports of gains in commercial
real estate markets," FDIC Chairman Ricki Helfer said. "Improving
commercial real estate markets are a big plus for banks both in terms of
reducing problem assets and creating new lending opportunities.
However, the reported loss of momentum in residential markets is likely
to affect the demand for home loans."

Under the index scoring system used to summarize the survey
results, scores above 50 indicate that more respondents thought
conditions were improving than declining, while readings below 50 mean
the opposite. The more the reading goes above or below 50, the greater
the proportion of positive or negative assessments.

The FDIC's composite index, covering both commercial and
residential real estate markets, fell one point to 61 for the April
survey. While that index figure matches the previous low level set four
years ago, it still indicates that real estate markets in general are
continuing to improve. Even so, these most recent index levels are far
below the peak of 78 a year ago, a decline attributable primarily to
weaker assessments of conditions in the housing market sector. The
following summarizes key findings.

Commercial markets: Thirty-eight percent of the respondents in
April observed improvements in their local commercial real estate
markets during the previous three months. Only three percent cited
worsening conditions, approximately the average for the past year.

Residential markets: Thirty-two percent cited an improvement in
local housing markets, the same figure as noted in January. However,
the 18 percent who observed worsening market conditions was up slightly
from the previous quarter.

Regional differences: Composite findings differed little across
regions of the U.S. The most notable improvements occurred in the
Midwest, the only region where observers were more positive about
conditions in both the commercial and residential real estate markets in
April than in the previous survey. Readings in all regions, however,
were far less positive than the significant gains noted a year ago.

The latest FDIC survey polled 401 senior examiners and asset
managers from the federal agencies about developments in the local real
estate markets they track.